ADP Spent $758.8 Million On Buybacks In A Quarter Its Equity Fell By Nearly $1 Billion
The payroll company's repurchases roughly doubled to $758.8 million while bond losses cut equity to $5,092.1 million.
ADP repurchased $758.8 million of stock in the September 2026 quarter, versus $366.0 million a year earlier, its 10-Q filed Friday shows. Over the same three months, unrealized losses on its bond portfolio helped push stockholders' equity down to $5,092.1 million from $6,031.2 million at June 30, 2026.
Buybacks and a thinner equity base
ADP bought back 2.9 million shares at an average $269.40, against 1.2 million shares at $302.10 a year earlier. The company says fewer shares helped lift diluted earnings per share to $2.83 from $2.49, with diluted shares at 397.6 million versus 406.5 million.
Equity fell even though net earnings were $1,125.2 million. Other comprehensive loss of $668.3 million and treasury stock purchases of $821.2 million outweighed that profit. The company also declared dividends of $1.70 per share, and said it returned $1.5 billion to shareholders in the quarter, $0.7 billion of it dividends and $0.8 billion buybacks.
On Friday, ADP shares traded at $295.72 in afternoon trading, up about 3% from the prior close of $286.08, for a market value of $113.2 billion.
The bond portfolio behind the losses
ADP holds payroll money for clients and invests it in bonds. Net unrealized pre-tax losses on its securities reached $1,312.8 million, versus $459.2 million at June 30, 2026 and $361.4 million in its filing for the quarter ended March 31. Gross unrealized losses were $1,322.3 million, up from $574.4 million at June 30.
Corporate bonds carried $757.1 million of those losses and Treasuries $226.1 million. ADP says it ladders maturities out to five years for its extended portfolio, averaging its way through an interest rate cycle, and all of the securities were rated investment grade.
The portfolio also earns income. Interest on funds held for clients rose to $329.3 million from $286.8 million, as the average rate climbed to 3.6% from 3.3%.
Operations and liquidity
Revenue grew 6% to $5,490.7 million. Adjusted EBIT margin expanded 130 basis points, or 1.3 percentage points. In an earnings release on Wednesday, ADP raised its fiscal 2027 outlook, projecting adjusted diluted EPS growth of 10% to 12%, up from 9% to 11%.
The company had no borrowings under its credit facilities and no commercial paper outstanding. A $5.7 billion, 364-day credit agreement expires in June 2027 and can be converted into a one-year term loan.
The 10-Q describes the company's financial condition as solid at September 30, 2026, with $3.3 billion of cash and $11.7 billion of committed credit facilities.
Sources
- 10-Q Filing — Automatic Data Processing (ADP) — SEC EDGAR
- 10-Q Filing — Automatic Data Processing (ADP), Q3 FY2026 filed 2026-04-30 (comparison basis) — SEC EDGAR
- 10-K Filing — Automatic Data Processing (ADP), filed 2026-08-05 (earlier disclosure) — SEC EDGAR
- Earnings release (8-K Item 2.02, q1fy27exhibit99.htm) — Automatic Data Processing, filed 2026-10-28 — SEC EDGAR
- Automatic Data Processing, Inc. (ADP) Seasonal returns chart - Yahoo Finance — Yahoo Finance
- ADP: Fiscal Q1 Earnings Snapshot – WTOP News — wtop.com
- Automatic Data Processing (ADP) Tops Q1 Earnings and Revenue Estimates — Yahoo Finance
- Automatic Data Processing, Inc. - ADP Reports First Quarter Fiscal 2027 Results — investors.adp.com
- ADP 1Q Net Up, Company Boosts FY27 Adj EPS View Amid AI Adoption — MarketWatch
